At stake is the obscenity section of the Communications Decency Act, which bans publishing "obscene" material on the net. The problem is that US courts use "local standards" to determine whether something is obscene -- so if in the eyes of some local community, the material is obscene, then you can't distribute it there.
But the Internet can distribute material into all communities in the country, and because the Communications Decency Act is federal, prosecutors can bring their charges in the most sex-o-phobic corner of the country (say, the conservative Catholic private town that the guy who founded Domino's Pizza is building in Florida).
By turning down this case, the Supremes have said that the whole country is now subject to the decency standards from its most conservative, anti-sex, anti-nudity corners; that the local standard from that place will become the national standard.
"According to the court's decision," Alan Levy, a lawyer and member of the NCSF, wrote in an article for the New York Law Journal last year, "in order to prove that the statute is overbroad, one would have to present evidence regarding each of the 1.4 million web sites and determine whether each of the local communities in the Unied States would deem the material on that Web site as obscene. ... Considering that there are 94 federal districts in the country (temporarily ignoring that there are numerous communities within a district); if one multiplies the number 1,400,000 by 94, we reveal 131,600,000 possible applications of the CDA, and that only applies to adult sites that happen to have material related to [sadomasochism]."Link (Thanks, Seth!)
I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.